Sally purchased a new tractor from a large dealership, after being told by a sales representative that it had features making it the most powerful tractor on the Australian market selling for under $100,000. Unfortunately, the sales representative had made an honest mistake about the capabilities of various tractors and what he told Sally was incorrect. When Sally complained about this, after purchasing the tractor, the dealership pointed out that in the contract of sale she had signed, there was an exclusion clause. That clause provided that there was no guarantee made about the accuracy of any statements of the dealership's representatives. Although Sally agreed that she had signed this contract, she said that she had not read this clause. Which of the following statements is CORRECT? Select one: a. The dealership is protected by the contract that Sally signed and therefore it cannot be responsible for what the representative said about the tractor. b. Sally has no claim against the representative or the dealership as the mistake was an honest one. c. The dealership is responsible for its employee's statement and has engaged in misleading or deceptive conduct (s 18), and it also made a false representation (s 29(1)(a)), for which it is liable to Sally. d. Sally has a claim against the sales representative, but not the dealership, as it was the representative that made the incorrect statement.
Question
Sally purchased a new tractor from a large dealership, after being told by a sales representative that it had features making it the most powerful tractor on the Australian market selling for under $100,000.
Unfortunately, the sales representative had made an honest mistake about the capabilities of various tractors and what he told Sally was incorrect. When Sally complained about this, after purchasing the tractor, the dealership pointed out that in the contract of sale she had signed, there was an exclusion clause. That clause provided that there was no guarantee made about the accuracy of any statements of the dealership's representatives. Although Sally agreed that she had signed this contract, she said that she had not read this clause.
Which of the following statements is CORRECT?
Select one:
a. The dealership is protected by the contract that Sally signed and therefore it cannot be responsible for what the representative said about the tractor.
b. Sally has no claim against the representative or the dealership as the mistake was an honest one.
c. The dealership is responsible for its employee's statement and has engaged in misleading or deceptive conduct (s 18), and it also made a false representation (s 29(1)(a)), for which it is liable to Sally.
d. Sally has a claim against the sales representative, but not the dealership, as it was the representative that made the incorrect statement.
Solution
The correct answer is:
c. The dealership is responsible for its employee's statement and has engaged in misleading or deceptive conduct (s 18), and it also made a false representation (s 29(1)(a)), for which it is liable to Sally.
Here's why:
Under the Australian Consumer Law (ACL), businesses are prohibited from engaging in conduct that is misleading or deceptive, or is likely to mislead or deceive (s 18). They are also prohibited from making false or misleading representations about goods or services (s 29(1)(a)).
In this case, the sales representative of the dealership made a false representation about the capabilities of the tractor, which is considered misleading conduct. Even though the sales representative made an honest mistake, the dealership is still responsible for the statements made by its employees.
The exclusion clause in the contract does not protect the dealership from liability under the ACL. This is because such clauses are often considered unfair and therefore unenforceable under the ACL.
Therefore, the dealership has contravened the ACL and is liable to Sally for the misleading conduct and false representation.
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Mary is based in Queensland and manufactures tractors and farm equipment. She has sold products over many years to many farmers in Australia, New Zealand and Southeast Asia. Mary intends to market a new tractor with special novel features. She emails all former customers describing the tractor and offering it for sale for $130,000. The email legally amounts to a contractual offer. The latest "Farmers Journal" contains an advertisement for a similar tractor from a competitor for only $110,000.Beatrice resides in Bundaberg (Queensland) and is a long-standing customer of Mary. On Friday 1 September at 8.00 pm Beatrice sent an email to Mary accepting the offer for one tractor. Beatrice's leading farm hand, James, believes that the farm could use two tractors, so he used Beatrice's computer and Beatrice's email account to accept the offer for the purchase of a second tractor. He "signed" the email "Beatrice". Over, over the weekend, Beatrice read the advertisement in the Farmers Journal. On Sunday 3 September, Beatrice personally telephoned Mary. Beatrice established that Mary had not read her email, as she would not be expected to check her business emails until Monday morning. Beatrice then states that she withdraws her acceptance and that her email should be ignored.
The partial performance exception to the statute of frauds covers contracts involving: Blank______.Multiple choice question.the sale of goodsa property interestthe sale of automobiles onlymutual promises to marry
If a buyer has rightfully rejected the goods, they may cancel the contract, Blank______ and Blank______.Multiple select question.accept goods without payment.recover as much of the purchase price that is paid.sue the buyer for emotional damages.recover damages.
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